Home » Finance » Reaping Profits of Penny Stocks

In the world of stock markets, the smaller companies may trade over the counter instead of being listed in the bigger exchanges. These are known as penny stocks and they are broadcast on pink sheets. However there are large companies that traditionally trade over the counter. The pink sheets are generally defined for stocks that are below five dollars. The over the counter broadcast bulletin or OTCBB updates the current offerings on the pink sheets. Companies trading over the counter can be identified with the initials PK at the end of their stock symbols. 

Caution should be exercised by beginners when buying their first penny stock. The over the counter investment market has be known to be the hunting grounds for companies in bad debt. Off the counter stocks are not as regulated as the major players but some of them are considered highly reliable. Bonds for instance are sure thing investments for the long term. Bonds are not considered as hot penny stocks by most investors but they can also be negotiated starting from the price quoted. 

Micro capitalization is set to lie between 50 million and 300 million dollars. The ability of investors to spot patterns can earn them the ability to make huge profits within a financial year. This ability is attained by a lot of research and experience. Pink sheets come in handy as so does the OTCBB. Certain trading criteria and industry practices give one a winning stride. The key is to have a good dealer and a diversified portfolio results in great returns.

Comments are closed.